Markets

Daily Market Wire 23 December 2021

Lachstock Consulting, December 23, 2021

Overnight trading saw wheat and corn contracts post gains, while oilseeds were mixed.

  • Chicago wheat March contract up US15 cents per bushel to 814c/bu;
  • Kansas wheat March contract up 12.25c/bu to 853.75c/bu;
  • Minneapolis wheat March up 2.25c/bu to 1027.75c/bu;
  • MATIF wheat March contract up €7.25/t to €292.25;
  • Corn March contract up 4.25c/bu to 602.5c/bu;
  • Soybeans March contract up 22.25c/bu to 1335c/bu;
  • Winnipeg canola January 2022 contract down C$3.80/t to $1018.80/t;
  • MATIF rapeseed February 2022 contract up €8.75/t to €746.75/t;
  • AUD firmer at US7235c;
  • ASX wheat January 2022 up A$3/t to $368/t;
  • ASX wheat January 2023 up $2/t to $375/t.

International

Trade was thin pre-Christmas trade and option expiry in the mix adds to the volatility.

Lots of questions exist about Australia’s and the US’s ability to set Iraq on wheat, and quality out of Australia is the big question.  Given Iraq’s requirements for a mix of H2 and APW, there will be some trepidation on adding to the existing protein shorts. With ample availability this would price out of Australia, but this year, it is not so simple

MATIF was solid as a rock overnight, which makes sense given the tightness of the French balance sheet.

Ukraine has flagged limiting its exports in line with Russia for the first half of 2022.

US export sales will be watched closely; recent pace has been impressive so the test will be if the US can still sell wheat post a 50c/bu rally.

US HRW basis markets are high, and it seems the US transport market is a major contributor to the strength. This dislocation in the transport market suggests the US could be better off importing Argentinian wheat rather than trying to move domestic HRW – amazing.

Australia

Markets showed some life yesterday locally, with cashboards firming up on wheat, and protein wheat catching a bid and finishing the day at A$10-$12/t higher

South Australia gained momentum over the day, with the Port Lincoln APW1 track bid up to $400/t again.

Lower-grade wheat along in eastern states also firmed $5-6/t on the cashboards.

Barley followed suit, and was also stronger on the bid by $4-$5/t, while canola also found some ground although there was little activity from growers who have shut up shop for now.

The pulse market pulse has stopped, with bids pulling back and buyers comfortable with short-term coverage levels for now.

Domestic consumers are now kicking around on the bid side for faba beans as it now works back into the ration at around $450/t in Victoria.

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